1974 (2) TMI 17

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....sioner. The Inspecting Assistant Commissioner heard the assessee, and on 4th November, 1965, passed an order imposing a penalty of Rs. 3,000. He observed that the maximum penalty imposable in this case worked out to 'Rs. 3,630 and so the imposition of Rs. 3,000 as penalty was reasonable. The assessee took this order in appeal to the Tribunal. Before the Tribunal it was argued that on the finding, that the maximum penalty imposable was Rs. 3,630 which, in other words, meant that this amount was on and a half times of the amount of tax which would have been avoided if the income ts returned by the assessee had been accepted as the correct income, the minimum penalty, which should be 20 per cent. of the avoided tax, would work out to Rs. 48....

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....pect of the fresh order of penalty, and that he was, therefore, competent to pass a fresh penalty order. Aggrieved, the assessee went up in appeal to the Tribunal. It was urged before the Tribunal that the order passed by the Inspecting Assistant Commissioner was barred by limitation of two years provided in section 275 of the Income-tax Act, 1961. To this contention the, departmental representative's reply was that, as held by the Supreme Court in Bhopal Sugar Industires Ltd. v. Income-tax Officer, Bhopal, the Inspecting Assistant Commissioner was duty bound to carry out the directions of a superior appellate authority, namely, the Tribunal. The Tribunal upheld this plea of the department and held that the Inspecting Assistant Commissio....

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....961, even though he otherwise thought it expedient to pass a fresh order in consequence of the Tribunal's order dated March 13, 1967, under section 254 and on that ground in cancelling the penalty imposed by the Inspecting Assistant Commissioner under section 271(1)(c) read with section 274(2) of the Act?" The principal aspect raised by the question referred to us is whether the period of limitation prescribed by section 275 was applicable to the proceedings conducted by the Inspecting Assistant Commissioner as a result of the Tribunal's order dated 13th March, 1967. In this view both the findings of the Tribunal, namely, the one on the question whether the Inspecting Assistant Commissioner could validly pass a fresh order of penalty irresp....